If the bill comes into force it might go some way in solving Kolhapure's problem.
The draft says developers will have to get accreditation for projects from the regulator, make public disclosure of details including the price of units, and maintain a separate bank account for each project to collect payments from buyers.
However, there is widespread cynicism about whether it can stamp out the practice given the belief that a large share of illicit money sloshing around the sector is tied to politicians.
"There can't be a legal measure to put an end to black money ... because ultimately it ends up in the political cycle. That is where the requirement is," said a Mumbai-based income tax official who did not wish to be named.
Allegations last month of improper dealings between Robert Vadra, the son-in-law of ruling Congress party chief Sonia Gandhi and DLF, India's biggest property developer, underline the perception of a nexus between developers and politicians.
Activist group India Against Corruption accused DLF of arranging favourable loans and real estate transactions for Vadra, a businessman married to Gandhi's daughter, who had previously announced a possible move into politics.
The company and Vadra both deny wrongdoing.